2007-04-23 05:53:05 · 4 answers · asked by Chi Town playa 2 in Business & Finance ➔ Taxes ➔ United States
Do not file an Offer in Compromise. First Bostonian is right you have to put up 20% and if the IRS reject it you dont get that back it just goes toward your payment. And there have only been a handful even filed since this rule its just not worth it.
2007-04-26 18:37:52 · answer #1 · answered by BMAC 2 · 0⤊ 0⤋
It is possible to do this yourself, but the road is long and rather painful. Only a small percentage of all OICs are approved. There either must be strong doubt as to liability or it must be basically impossible for you to ever be able to pay the bill in full.
An OIC application lays open your entire financial picture including all assets such as home, auto, stocks, bank accounts, etc. along with an assessment of your ability to pay the debt based upon projected future earnings. (Other liabilities aren't taken into consideration as the IRS expects that they'll be paid first though they only consider your equity on secured loans such as mortgages.)
You'll need to come with a non-refundable $150 application fee and in many cases you must include a deposit of 20% of the total offer amount. The fee can be waived if you're pretty nearly penniless as can the deposit but you'll need to prove your inability to pay that as part of the package. If your application is denied, the deposit will be retained by the IRS but will be credited against your total debt.
2007-04-23 13:08:35 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 1⤋
I resolve my tax debt every year by sending in a letter with my own payment plan, explaining I am able to pay $100 a month for X amount of months until the debt is paid for.
You may have an alternative amount of money you are able to pay each month but make it a reasonable plan and they will work with you. The IRS may make modifications to your re-pay plan but I've I've never had them say no to a payment plan.
No worries, you'll be fine!
2007-04-23 13:04:08 · answer #3 · answered by Frog-Leggs 3 · 1⤊ 2⤋
Very difficult to do it yourself. You really need an attorney who knows what they are doing. DO NOT sign anything the IRS gives you without having it reviewed by your lawyer. I have tried both ways and the time I didn't use a lawyer, I was haunted for years.
2007-04-23 13:01:39 · answer #4 · answered by WJVV 4 · 0⤊ 1⤋